Did MercadoLibre’s (MELI) Q2 Revenue Surge Offset Mixed Profitability in Shaping Its Investment Narrative?

• MercadoLibre released its second quarter 2025 earnings, reporting US$6.79 billion in revenue and US$523 million in net income for the period ended June 30, 2025, compared to US$5.07 billion and US$531 million respectively a year earlier.
• Despite a small decrease in net income for the quarter, the company posted significant year-over-year revenue growth and a rise in net income for the first half of the year.
• We'll explore how strong revenue momentum amid mixed profitability impacts MercadoLibre's investment story and analyst expectations moving forward.

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MercadoLibre Investment Narrative Recap

To be a shareholder of MercadoLibre, you need to believe in the company’s ability to drive sustained user and revenue growth across Latin America’s rapidly digitizing markets while balancing margin pressures from heavy reinvestment and fierce competition. The recent second quarter results confirmed strong revenue expansion but a slight dip in net income, which does not appear to materially change the most important near-term catalyst: continued user and transaction growth. The main risk to watch remains the margin impact from higher logistics and customer acquisition spend.

Among recent announcements, MercadoLibre’s intention to boost its Brazil investment by 48% this year stands out. This move aims to strengthen logistics, technology, and marketing infrastructure, supporting the core catalyst of online retail and payments adoption. These reinvestments, paired with the robust top-line trend, are essential for fueling ongoing platform growth.

However, with margin pressure already visible in the latest results, investors should also be mindful of what happens if logistics scaling doesn’t produce cost efficiencies fast enough...

Read the full narrative on MercadoLibre (it's free!)

MercadoLibre's narrative projects $45.9 billion in revenue and $5.2 billion in earnings by 2028. This requires 23.9% yearly revenue growth and a $3.1 billion increase in earnings from the current $2.1 billion.

Uncover how MercadoLibre's forecasts yield a $2843 fair value, a 19% upside to its current price.

Exploring Other Perspectives

Thirty fair value estimates from the Simply Wall St Community range from US$1,397 to US$3,406 per share, showing wide conviction gaps. While many expect growth to accelerate, ongoing investments and margin risks are never far from the mind for those watching this story unfold.

Explore 30 other fair value estimates on MercadoLibre - why the stock might be worth as much as 42% more than the current price!

Build Your Own MercadoLibre Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your MercadoLibre research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free MercadoLibre research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate MercadoLibre's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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